Integrity Surcharge Not Included

Ticket reselling- or scalping, to anyone who doesn’t directly profit from the act- is an old scheme that any concertgoer or sports fan has dealt with at one time or another; brokers buy seats, then flip them to the public at a staggeringly inappropriate markup. Unfortunately, the real scalpers of today are a far cry from the homeless dude waving a sign around on the corner who reeks to high hell. Reselling has become a booming business, generating nearly $4 billion a year, and the big players in the game are now the very people who are supposed to fight it.

Remember: the music industry has made their fortunes by jacking up prices until the masses were no longer willing to pay the premium. Does nobody remember that less than a decade ago the likes of Sam Goody and Tower Records were making an absolute killing by charging kids $18.99 a CD? It was a long run through the fields of excess, but those days are over. Revenues plummeted when faster, more convenient and cheaper (read: FREE) means of obtaining music became available. Nowadays, you’re six clicks away from anything your heart desires. Comprehensive record collections are no longer a matter of elite access. The music industry- sluggish from years of gluttonous feasting on exorbitant profits- has largely decided that re-formatting is just too troublesome. Instead, they’re digging their heels in, ready to fight the tidal wave of inevitability looming all around them, declaring war on the consumers that have finally realized that they’ve been footing the bill on the expense accounts and jet-set lifestyles all this time. Sounds pretty familiar, I’d say.

Naturally then, the direct result of the record industry free-fall is a new focus on live performance as a main means of generating revenue. This, unfortunately, moves us into the deadly waters, where only the biggest, meanest sharks thrive- and they are thriving, because they’re teaming up. They’re forming packs. Ticketmaster/Live Nation is a nightmare union that will change the face of live music, much the same way exorbitant album prices led to the Pirate Revolution. It’s not as if we can start stealing an actual live concert experience, but as fans we can sure as hell show our colors by abandoning a structure designed only to benefit the privileged, and supporting artists who are fighting the good fight.

Artists like Trent Reznor. As nucleus and mastermind of Nine Inch Nails, Reznor has become the poster boy for modern artist etiquette, having paved the way for an entirely new music business attitude through forward-thinking marketing concepts that not only center on communicating with fans directly, but empathize with the average music lover. He believes music should be accessible, and concert ticket prices should be reasonable. A fundamentally appealing concept, but clearly an unpopular one among those holding the reins of the industry today.

Reznor posted a message to the NIN.com forums Sunday, explaining his feelings on the scalping issue. As he points out, while 360° deals with the likes of Live Nation replace conventional recording contracts between artist and label, an inevitable underbelly has developed in parallel, through the purchase and proliferation of major scalping sites like TicketsNow.com.

Trent’s argument largely centers on the fact that it’s fully within Ticketmaster’s power to stop the secondary market immediately, but they profit too heavily from the back-end deals to ever willingly do such a thing. Instead of doing right by legions of music lovers and squashing the black market monopoly, Ticketmaster bought TicketsNow.com, a glorified scalping site, to add to their TicketExchange site, which serves largely the same purpose (albeit under a “fan-to-fan” sales guise). It only gets worse from here.

The TM/LN merger is a move that ups the ante on corruption and greed in a way that hasn’t been seen since the initial pairing of hookers and blow. Reznor’s prediction that Ticketmaster will move to a market-based pricing scheme has already come true, however; the merger hasn’t even happened yet, but TM has wasted no time in becoming a gang of thug scalpers- they’re just using a different name.

Leonard Cohen tickets, which recently sold out with suspicious immediacy on Ticketmaster for $99-$250, popped up simultaneously on TicketsNow for up to $856 per ticket. Hell of a mark-up, no? It sure is- but that ridiculous price isn’t what you’ll be paying. No sir. With a service charge of up to $128 per ticket, among other ambiguous, unexplained fees (what the hell is a building facility charge?), you’re looking at a total of close to $1,000. Per ticket.

Reznor’s hypothetical counter-argument is a valid one, however: “If people are willing to pay a lot of money to sit up front AND ARE GOING TO ANYWAY thanks to the rigged system, why let that money go into the hands of the scalpers? I’m the one busting my ass up there every night.” According to several managers of top artists and Ticketmaster execs, that’s exactly the mentality that draws their clientele into the arrangements. The company regularly offers to list hundreds of the best tickets for each concert on one of its two resale Web sites. They then divide the extra revenue, which can top $2 million on a major-name tour, with artists and promoters- depending on who’s in on the scheme.

The only difference, the reason Gene Simmons will never grasp the Reznor model, is sheer, basic humanity. “The conclusion really came down to it not feeling like the right thing to do- simple as that,” he said.

Reznor also proposes that music fans be suspect of artists singing the praises of the Live Nation/TicketMaster merger. “What’s in it for them?” he asks. Perhaps Billy Corgan could answer that best. Or, better yet, any of the artists who have already profited hand over fist from this racket. Names like Britney Spears. Bon Jovi. Van Halen. Celine Dion. Billy Joel and Elton John. Neil Diamond. Sting. Acts that have already made hundreds of millions of dollars off their adoring fans, but like Gene Simmons, would never pass on an opportunity to screw their followers even harder.

Not everybody does this, of course. Bob Lefsetz recently called out some of the industry’s biggest offenders on the issue, inspired by another great piece on ticket re-selling, which can be found here.

Suffice to say, Trent Reznor is not among them. And neither is Pearl Jam, who are perhaps the most fan-loyal band in music today. About 15 years ago, Pearl Jam testified in front of Congress on Ticketmaster’s shady dealings. The band were tired of seeing their fans charged into oblivion, and wanted to offer tickets to their summer tour for under $20. They asked Ticketmaster to charge less than $2 per ticket in service fees, and Ticketmaster naturally refused, so Pearl Jam canceled its tour and took its case to Washington.

It was a noble fight, but PJ were ultimately squashed like bugs because nobody had the balls to get their back, and in the real world, David usually gets stomped to death by Goliath unless he’s got a lot of friends or a hell of a secret weapon. Without a collective of like-minded artists supporting the cause on the frontline, there’s no battle to be fought. An ugly death awaits anyone who gets in the ring.

That is, unless you’re rooting for the big guy. Billy Corgan of the Smashing Pumpkins wrote a letter to the US House Committee on the Judiciary last week, explaining why he thinks the Ticketmaster/Live Nation merger is a good idea.

“Artists now find a heavy shift of emphasis to the live performance side, and this is where this merger finds its merit,” Corgan claims. “The combination of these companies creates powerful tools for an independent artist to reach their fans in new and unprecedented ways, all the while restoring the power where it belongs. In today’s ever changing world, the ability for artists to connect to their fans and stay connected is critical for the health of our industry. Without sustainable, consistent economic models upon which to make key decisions, it is both the music and the fans that suffer.”

Restoring the power where it belongs?! Can I get a collective “What The Fuck!?”

Corgan’s philosophy seems to be that fans should allow companies that have thrived on greed and price-jacking for years to gain a greater control of the concert market. Live Nation telling Ticketmaster to reduce prices and stop treating customers like shit isn’t a far cry from O.J. telling Chris Brown to “ease up on the girl.” Essentially, all you need to know about Corgan’s motives lies in the money trail: the CEO of Ticketmaster, Irving Azoff, just so happens to manage the Smashing Pumpkins.

For two decades, Ticketmaster has gotten away with charging concert fees far beyond the pale in terms of corporate profitability. They’ve clearly gotten too top-heavy for the good of the public, yet the merger looms large.

“This deal is not in the best interest of fans,” said Michael Hershfield, co-founder and CEO of LiveStub, another scalping company who would undoubtedly go belly-up if the merger goes through. “This deal would mean that Live Nation would have direct access to Ticketmaster’s ticketing solution, including its resale marketplace TicketsNow. Live Nation could potentially harness Ticketsnow and begin to offer performers the opportunity to list tickets on the resale system without ever listing in the primary market.” When even the scalpers are complaining about being out-scalped, you can rest assured that it’s a bad deal.

So how is the war won? Unfortunately, there aren’t many options. Fans can either attempt a mass concert boycott- a futile cause if I’ve ever heard of one- or fight, leading by example and doing it the right way. Nine Inch Nails (along with several other acts, Pearl Jam being most consistent/effective among them) are constantly fighting the industry to set aside 10% of the seats at each venue, the tickets for which are distributed in a much more efficient, legitimate manner than the standard system- complete with a separate entrance where IDs are checked to make sure that the preferred seats aren’t sold to the highest bidder. By doing this, Reznor, along with every other act who takes part, is ensuring that the experience is preserved for that collection of true fans who have the passion to go the extra mile and keep their finger on the pulse of their favorite artists.

This opens up new pathways to communication between artists and fans, something that runs a convenient and exciting parallel to the advancement of technology. In fact, this piece came about because I follow Trent via Twitter, and was inspired by his piece. And as a matter of fact, a perfect example of the torching of the rule book of musical distribution just showed itself. Trent and Dave Navarro apparently spent an hour giving away a zip file of Jane’s Addiction’s Nothing’s Shocking record, just for the hell of it:

Another interesting approach to the fight is taking place in Arkansas, where a new proposal would eliminate the speculative selling of event tickets- mandating that all tickets, except for sports tickets, cannot be sold until after first being offered to the general public.

Arkansas Sen. Larry Teague sponsored the bill, and he told TicketNews catalyst for the proposal was the difficulty fans had resulting from the Hannah Montana tour of 2007-08, for which some people allegedly bought spec tickets from some sites and were ripped off.

“This bill was designed to deal with that,” Teague said. The bill could be voted on by the state House of Representatives as early as Monday, March 16.

The proposed bill states, “Tickets of admission to a live entertainment event, theatre, musical performance, or place of public entertainment or amusement of any kind shall not be offered for sale by any person over the Internet until the tickets have first been offered for sale to the public via an event authorized outlet or offering.”

It continues, “Internet portals or websites shall not allow any person to offer for resale any ticket of admission to a admission to a live entertainment event, theatre, musical performance, or place of public entertainment or amusement of any kind until the tickets have first been offered for sale to the public via an event-authorized outlet or offering.”

This would effectively cut the heart right out of the TicketsNow approach, although it would also cut into fan club deals that many artists make for their most devoted fans.

So where is the middle ground? What’s the happy medium? The grim fact is that there may not be any. But one thing is for sure- no matter what Billy Corgan may be trying to sell you, the Ticketmaster/Live Nation merger is a nightmare scenario that will eventually cripple the current structure of the live concert business.

We’ll be following up very soon with an exclusive interview with Nic Adler, owner of The Roxy (one of Los Angeles’ hottest venues) and an all-around very cool guy. He weighs in on the merger, shedding some light from a perspective we haven’t yet heard enough from- the venue’s.

Johnny Firecloud's been kickin' names and takin' ass since his first interview in 2001 with A Perfect Circle, 6 years before starting AQ with Kevin Cogill. He's also spent nine years as music editor/senior writer at CraveOnline.

9 Comments

i realize this is addressing just a tiny part of your well researched and well written tirade, but my first job actually, was ticket scalper. i was fourteen, but a friend of the family had a ticket agency and would trust me with thousands of his dollars to go out, wait in line, and buy tickets, which i would then hand over to him for money. and he would then sell them for lots more of course.
i wanted to add a little perspective to that side of things. those “homeless” guys waving signs you remember from way back? a lot of those guys were my people. they were guys unloading the tickets that the agencies didn’t sell.
i didn’t buy online. i would spend an entire night in a cold parking lot of a video store or record store or wherever to get good seats. i didn’t know all the ins and outs of the business- i still don’t. but i reasoned that if a real fan wants to get good seats, they could beat me to the line. i saw it as fair play. the big problem we had then was the people working the ticket machines- sometimes they were just slow, but sometimes they would pull the first few seats out for someone- usually a competing agency. mine played fair. we learned how to count heads and read the codes printed on our tickets to see if what we got was what we earned. if we figured out that a place had a ticket puller, we’d blacklist the outlet.
occasionally i would head from philly up to new york to buy tickets, and the problem there was the mob. they’d send literally a busload of rejects to the venue to buy up all the seats.
buying online was kind of an alien concept. buying over the phone was more popular, if you could believe that. both systems sucked. you’d pray to just get through, let alone get a good seat.
but as the online system matured, it no longer became necessary to go out and wait in line for tickets. you could earn the same money rolling out of bed at 9 and logging in.
shortly after the online revolution, i got out of the business. i don’t know what it was, maybe puberty. and so i’m not qualified to tell you how scalping has become what it is today. but i get the feeling that the more the playing field was leveled, the more the big agencies had to resort to leveraging their power and connections to get the upper hand.
and i find myself wondering if the opposite will happen if the playing field suddenly becomes even more grossly uneven and the big get bigger here. it’s one of the ideas that comes up in our interview with nic adler, going up later today. stay tuned.

I’m not sure what can be done about the ticketmaster merge thing, but with scalping there always seemed to be a somewhat easy solution to the problem. Don’t sell tickets so early, if tickets are only sold about 3 weeks before the event it does not give the Internet scalpers enough time to recieve the tickets and send them on. Another step is to ban scalpers at venues. Being from Australia, I’m not sure if there is a law or something but we just don’t have scalpers at concerts. Since I’ve moved to London though they are everywhere. Why it can’t be just made illegal is beyond me.

“…the Ticketmaster/Live Nation merger is a nightmare scenario that will eventually cripple the current structure of the live concert business.”
I say let it burn, apparently that’s the only way things will change.

“Restoring the power where it belongs?! Can I get a collective “What The Fuck!?”
That’s so fucking funny…I haven’t even finished reading past that point because instead of “WTF?” I said “Are you kidding me?”. Don’t read my mind like that…it’s spooky.
I’ll finish reading this now…